Mixed outcome at the bond auctions

• Secondary market activity muted
• Rs. 80 b T. bills on offer

 By Wealth Trust Securities

The outcome of the two Treasury bond auctions conducted yesterday was diverse as the 10-year maturity of 01.07.2032 saw its offered amount of Rs. 45 billion been taken up fully at its first phase of the auction while only Rs. 3.7 billion was taken up on the three-year maturity of 01.07.2025 from its 1st and 2nd phases of the auction against its offered amount of Rs. 30 billion. 

Furthermore, the 10-year maturity recorded a weighted average of 29.96%, well above the three-year maturity of 29.16%. A further 20% will be on offer by way of a direct issuance window on the 01.07.2032 maturity until close of business today. (i.e., 4.00 p.m. on 14 September). 

In the secondary bond market, 01.06.25 maturity changed hands at a level of 28.12% in morning hours of trading while in the secondary bill market, September - October 2022 and July - August 2023 maturities traded at levels of 20.00% and 30.25% to 30.40% respectively.

Today’s weekly Treasury bill auction will have in total an amount of Rs. 80 billion on offer, an increase of Rs. 5 billion in comparison to its previous weeks offered amount. This will consist of Rs. 35 billion of the 91-day maturity, Rs. 25 billion of the 182-day maturity and a further Rs. 20 billion of the 364-day maturity. 

At last week’s auction, weighted average rates remained steady at 32.89%, 31.28% and 30.50% on the three maturities respectively. An amount of Rs. 10.27 billion was accepted in total at the auction while a further amount of Rs. 38.14 billion was raised at its 02nd phase.

The total secondary market Treasury bond/bill transacted volume for 10 September 2022 was Rs. 1.15 billion.   

In money markets, the net liquidity deficit stood at Rs. 412.02 billion yesterday as an amount of Rs. 784.13 billion was withdrawn from Central Banks SLFR (Standard Deposit Facility Rate) of 15.50% against an amount of Rs. 373.11 billion deposited at Central Banks SDFR (Standard Deposit Facility Rate) of 14.50%. The weighted average rates on overnight call money and REPO stood at 15.50% each.

Forex Market 

In the Forex market, the middle rate for USD/LKR spot contracts was at Rs. 362.2824 yesterday against its previous day’s closing level of Rs. 362.20.

The total USD/LKR traded volume for 12 September was $ 11.02 million.  

(References: Central Bank of Sri Lanka, Bloomberg E-Bond trading platform, Money broking companies)